Bill-paying app Velocity raises $12m in venture funding

Michael Bow is a reporter at City A.M. covering private equity, funds, investments and asset managers. He can be reached on michael.bow@cityam.com

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Velocity co-founders Alex Macdonald and Zia Yusuf have raised the cash from investors

A smartphone app which lets diners pay for their meal and drinks without requesting the bill has raised $12m (£7.6m) in one of the largest first funding rounds for a tech business in the UK.

Velocity, which was founded by two childhood friends in March 2014, has already signed 300 high end restaurants to the app, which lets diners see their meal order in real time and settle the bill on their smartphones without having to bother waiting staff.

The business, which has rolled out the service in London, and has a growing following in New York and Hong Kong, will use the cash to expand into 11 more cities across the world by the end of 2016.

Former Thomson-Reuters boss and chair of Morgan Stanley’s tech committee Tom Glocer is one of the backers of the venture, alongside Initial Capital partner Shukri Shammas.

A number of private financiers from firms like Brevan Howard, Goldman Sachs and Morgan Stanley are also understood to have backed the firm with their personal wealth.

The firm’s co-founders Zia Yusuf and Alex Macdonald, who met at secondary school and went on to become flatmates in London, have already signed up well known eateries like Hix Restaurants, Sketch, Gymkhana, Burger & Lobster and Cuckoo Club.

“First and foremost we’re a hospitality company and secondly we’re a tech company,” Macdonald said.

The two co-founders say the app can free up dozens of man-hours for waiters and waitresses, who no longer have to deal with the cumbersome job of taking payments at the end of a meal.

The company, which is based in Mayfair, also said customers using the app spent about 14 per cent more than the average customer at restaurants. Chrystal Capital raised the funds.

BEHIND THE DEAL: CHRYSTAL CAPITAL - KINGSLEY WILSON

1 Wilson has raised $650m for 32 high growth deals since he co-founded Chrystal Capital five years ago with two other partners.

2 He started his career as a media analyst at Collins Stewart in 1996 before moving to Investec. He graduated from the University of Cambridge.

3 The firm raised £14.5m last year in two rounds for easyProperty.com and raised £1m for bubble tea drinks business Bubbleology which is being rolled out across the UK.

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Wilson’s co-founder at Chrystal is James Innes, who worked in corporate finance at Arthur Andersen before moving into private equity at Isis Capital (since rebranded as Livingbridge).